A week after approving a 22% hike that customers will pay for a natural gas franchise tax, For the second meeting in a row, the Wichita City Council approved a 27% sales tax increase in the development around the new baseball stadium and on the east bank of the Arkansas River, including the Boathouse and Waterwalk developments. Council also approved a $127 million deal with private developers of land currently housing Metropolitan Baptist Church.
The CID
The first item on the agenda raised the sales tax to fund a Community Improvement District (CID). The sales tax is increased from 7.5% to 9.5% within the CID and state law does not require retailers to notify customers that they are being charged a higher tax rate.
According to Assistant City Manager Scot Rigby, the CID will last for 22 years and max out at $16.5 million dollars. A number of Wichita residents got up to speak about the CID increase. Celeste Racette asked the city council if anything from the development that the CID hinges upon has been spent.
Mayor Jeff Longwell confirmed that some of the money has already been spent.
“Some of those funds are going to pay off the baseball stadium, so we have spent some money,” said Longwell.
Craig Gable urged the city council to reconsider the generous spending downtown.
“What we need in the city and we’ve lost are the Boeing jobs. We’ve spent a billion dollars in downtown development, between the airport and the arena and other stuff. It’s a billion dollars. We need 3,000 good-paying jobs. This is not going to do that,” said Gable.
Gary Plummer with the Wichita Regional Chamber of Commerce and representing the Riverfront Legacy Masterplan questioned the creation of the CID over land that ostensibly would be included in Riverfront Legacy Masterplan development.
Wichita City Councilman Bryan Frye calmed the Riverfront Legacy Masterplan supporters’ fears, saying that they would get their piece of the tax revenue pie.
“I’ve been assured as we go forward with this we can amend the district to create an allowance for revenue from that to be used for performing arts or a convention center and or green space on the east bank,” said Frye.
The Sentinel reached out to the city manager’s office to clarify Frye’s comment. Specifically, we asked if any carve-out for an east bank allowance would go toward the $16.5 million maximum of the CID or if the allowance would be an additional tax revenue stream for the next 22 years. Our request for comment was not returned.
The City Council voted unanimously to approve the 27% sales tax increase in the CID.
The Laham Developments
The second item connected to the baseball development was another unanimous vote to approve a private development agreement with Riverfront Partners LLC and Townstreet Partners LLC. The Sentinel reported last month about the different developments, but the fact that they are owned by some of the same people. City Council approval means that the city will pay $3 million dollars for land to be turned into parking lots to the west of the stadium. Calculations done by the Sentinel using the appraisal documents put the profits for the developers at just shy of $300,000.
The private development agreement also approves a $127 million development on land currently housing Metropolitan Baptist Church. The developer has a deadline of 10 years to build at least 60,000 square feet of commercial space. But as noted at a December 2019 city council meeting, the developers do not know yet what they will develop on the property. Joe Norton with Gilmore & Bell, the city’s bond counsel, noted that as development progresses so does the continued desire for incentives.
“That development group is talking about what they can do to develop this particular sight in phases. When those phases occur they are required to come back to council for approval of each phase and incentives to go with that,” said Norton.
Taxpayers will continue to bankroll incentives for this project for years to come. Just as Riverfront Legacy Masterplan prepares to also show up hat-in-hand for taxpayer handouts. Yet, Wichitan Craig Gable pointed out that the new development is only going to draw resources from other parts of the city.
“We need to figure out a way to bring people to town, not to cannibalize the businesses and people’s retirement around the city.” Gable continued, “The 6 million dollars we used to give to Go Wichita is all being used to siphon customers out of the city and out of the area near to downtown. And it’s cannibalizing the other businesses in town.”